SAN FRANCISCO, Feb. 28, 2017 /PRNewswire/ -- Salesforce
(NYSE: CRM), the world's #1 CRM company and the Intelligent
Customer Success Platform, today announced results for its fiscal
fourth quarter and full fiscal year ended January 31, 2017.
"Salesforce continues to deliver incredible innovation and
unprecedented customer success," said Marc
Benioff, chairman and CEO, Salesforce. "We led the industry
as the first to bring cloud, social and mobile to CRM, and now with
our latest release we are making artificial intelligence available
to millions of Salesforce users with Einstein."
"We drove tremendous execution during the quarter, delivering
nearly $2.3 billion in revenue," said
Keith Block, vice chairman,
president and COO, Salesforce. "And for fiscal 2018, we expect to
deliver more than $10 billion in
revenue--reaching that milestone faster than any enterprise
software company in history. No other software company of our size
and scale is growing at this rate."
"In addition to our outstanding top-line results, we also
delivered our first ever $2 billion
year of operating cash flow," said Mark
Hawkins, CFO, Salesforce. "To put these results in
perspective, over the last three years, we have doubled our
revenue, nearly tripled our free cash flow and improved non-GAAP
operating margin by more than 400 basis points."
Salesforce delivered the following results for its fiscal fourth
quarter and full fiscal year 2017:
Revenue: Total Q4
revenue was $2.29 billion, an
increase of 27% year-over-year, and 28% in constant currency.
Subscription and support revenues were $2.11
billion, an increase of 25% year-over-year.
Professional services and other revenues were $183 million, an increase of 45%
year-over-year.
Full fiscal year 2017 revenue was
$8.39 billion, an increase of 26%
year-over-year, and 27% in constant currency. Subscription
and support revenues were $7.76
billion, an increase of 25% year-over-year.
Professional services and other revenues were $636 million, an increase of 38%
year-over-year.
Earnings per Share:
Q4 GAAP loss per share was ($0.07),
and non-GAAP diluted earnings per share was $0.28. For the full fiscal year 2017, GAAP
diluted earnings per share was $0.26,
and non-GAAP diluted earnings per share was $1.01.
Cash: Cash generated
from operations for the fourth quarter was $706 million, an increase of 50% year-over-year.
Cash generated from operations for the full fiscal year 2017 was
$2.16 billion, an increase of 29%
year-over-year. Total cash, cash equivalents and marketable
securities finished the quarter at $2.21
billion.
Deferred Revenue:
Deferred revenue on the balance sheet as of January 31, 2017 was $5.54
billion, an increase of 29% year-over-year, and 29% in
constant currency. Unbilled deferred revenue, representing business
that is contracted but unbilled and off balance sheet, ended the
fourth quarter at approximately $9.0
billion, up 27% year-over-year. This includes approximately
$450 million related to unbilled
deferred revenue from Demandware.
As of February 28, 2017, the
company is initiating revenue, earnings per share, and deferred
revenue guidance for its first quarter of fiscal year 2018. In
addition, the company is raising its full fiscal year 2018 revenue
guidance previously provided on November 17,
2016. The company is also initiating earnings per share and
operating cash flow guidance for its fiscal year 2018.
Q1 FY18 Guidance:
Revenue is projected to be approximately $2.34 billion to $2.35 billion, an increase of
22% to 23% year-over-year.
GAAP loss per share is projected
to be ($0.03) to ($0.02), while
non-GAAP diluted earnings per share is projected to be $0.25 to $0.26.
On balance sheet deferred revenue
growth is projected to be approximately 22% to 23%
year-over-year.
Full Year FY18
Guidance: Revenue is projected to be approximately
$10.15 billion to $10.20 billion, an
increase of 21% to 22% year-over-year.
GAAP diluted earnings per share is
projected to be $0.05 to $0.07, while
non-GAAP diluted earnings per share is projected to be $1.27 to $1.29.
Operating cash flow growth is
projected to be 20% to 21% year-over-year.
The following is a per share reconciliation of GAAP loss per
share to non-GAAP diluted earnings per share guidance for Q1 and
GAAP diluted earnings per share to non-GAAP diluted earnings per
share guidance for the full year:
|
Fiscal
2018
|
|
Q1
|
FY2018
|
|
|
|
GAAP (loss) EPS
range*
|
($0.03) -
($0.02)
|
$0.05 -
$0.07
|
Plus
|
|
|
Amortization of
purchased intangibles
|
$
0.10
|
$
0.39
|
Stock-based
expense
|
$
0.32
|
$
1.32
|
Amortization of debt
discount, net
|
$
0.01
|
$
0.04
|
Less
|
|
|
Income tax effects
and adjustments**
|
$
(0.15)
|
$
(0.53)
|
Non-GAAP diluted
EPS
|
$0.25 -
$0.26
|
$1.27 -
$1.29
|
|
|
|
Shares used in
computing basic net income per share (millions)
|
707
|
716
|
Shares used in
computing diluted net income per share (millions)
|
723
|
733
|
|
|
|
* For Q1 GAAP loss
per share, basic number of shares used for calculation and expected
tax rate of 50%. For FY18 GAAP diluted EPS, diluted number of
shares used for calculation and expected tax rate of
64%.
|
|
** The Company's
non-GAAP tax provision uses a long-term projected tax rate of
34.5%.
|
For additional information regarding non-GAAP financial measures
see the reconciliation of results and related explanations
below.
Quarterly Conference Call
Salesforce will host a
conference call at 2:00 p.m. (PT) /
5:00 p.m. (ET) today to discuss its
financial results with the investment community. A live web
broadcast of the event will be available on the Salesforce Investor
Relations website at www.salesforce.com/investor. A live
dial-in is available domestically at 866-901-SFDC or 866-901-7332
and internationally at 706-902-1764, passcode 66074654. A
replay will be available at (800) 585-8367 or (855) 859-2056 until
midnight (ET) Mar. 28, 2017.
About Salesforce
Salesforce, the world's #1 CRM
company and the Intelligent Customer Success Platform, empowers
companies to connect with their customers in a whole new
way. Salesforce has headquarters in San Francisco, with
offices in Europe and Asia, and trades on
the New York Stock Exchange under the ticker symbol
"CRM." For more information about Salesforce,
visit: www.salesforce.com.
"Safe harbor" statement under the Private Securities
Litigation Reform Act of 1995: This press release
contains forward-looking statements about our financial results,
which may include expected GAAP and non-GAAP financial and other
operating and non-operating results, including revenue, net income
(loss), diluted earnings (loss) per share, operating cash flow
growth, operating margin improvement, deferred revenue growth,
expected revenue run rate, expected tax rates, stock-based
compensation expenses, amortization of purchased intangibles,
amortization of debt discount and shares outstanding. The
achievement or success of the matters covered by such
forward-looking statements involves risks, uncertainties and
assumptions. If any such risks or uncertainties materialize
or if any of the assumptions prove incorrect, the company's results
could differ materially from the results expressed or implied by
the forward-looking statements we make.
The risks and uncertainties referred to above include -- but are
not limited to -- risks associated with possible fluctuations in
the company's financial and operating results; the company's rate
of growth and anticipated revenue run rate, including the company's
ability to convert deferred revenue and unbilled deferred revenue
into revenue and, cash flow, and ability to maintain continued
growth of deferred revenue and unbilled deferred revenue; foreign
currency exchange rates; errors, interruptions or delays in the
company's services or the company's Web hosting; breaches of the
company's security measures; the financial and other impact of any
previous and future acquisitions; the nature of the company's
business model, including risks related to government contracts;
the company's ability to continue to release, and gain customer
acceptance of, new and improved versions of the company's services;
successful customer deployment and utilization of the company's
existing and future services; changes in the company's sales cycle;
competition; various financial aspects of the company's
subscription model; unexpected increases in attrition or decreases
in new business; the company's ability to realize benefits from
strategic partnerships and strategic investments; the emerging
markets in which the company operates; unique aspects of entering
or expanding in international markets, including the compliance
with United States export control
laws, the company's ability to hire, retain and motivate employees
and manage the company's growth; changes in the company's customer
base; technological developments; regulatory developments;
litigation related to intellectual property and other matters, and
any related claims, negotiations and settlements; unanticipated
changes in the company's effective tax rate; factors affecting the
company's outstanding convertible notes, term loan, and revolving
credit facility; fluctuations in the number of company shares
outstanding and the price of such shares; collection of
receivables; interest rates; factors affecting the company's
deferred tax assets and ability to value and utilize them; the
potential negative impact of indirect tax exposure; the risks and
expenses associated with the company's real estate and office
facilities space; and general developments in the economy,
financial markets, and the impact of current and future accounting
pronouncements and other financial reporting standards and credit
markets.
Further information on these and other factors that could affect
the company's financial results is included in the reports on Forms
10-K, 10-Q and 8-K and in other filings we make with the Securities
and Exchange Commission from time to time. These documents
are available on the SEC Filings section of the Investor
Information section of the company's website at
www.salesforce.com/investor.
Salesforce.com, inc. assumes no obligation and does not intend
to update these forward-looking statements, except as required by
law.
© 2017 salesforce.com, inc. All rights
reserved. Salesforce and other marks are trademarks
of salesforce.com, inc. Other brands featured herein may
be trademarks of their respective owners.
salesforce.com,
inc.
Consolidated
Statements of Operations
(in thousands,
except per share data)
(Unaudited)
|
|
|
Three Months Ended
January 31,
|
|
Fiscal Year Ended
January 31,
|
|
2017
|
|
As a % of
Total
Revenues
|
|
2016
|
|
As a % of
Total
Revenues
|
|
2017
|
|
As a % of
Total
Revenues
|
|
2016
|
|
As a % of
Total
Revenues
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscription and
support
|
$
|
2,110,651
|
|
|
92%
|
|
$
|
1,682,660
|
|
|
93%
|
|
$
|
7,756,205
|
|
|
92%
|
|
$
|
6,205,599
|
|
|
93%
|
Professional services
and other
|
183,337
|
|
|
8
|
|
126,738
|
|
|
7
|
|
635,779
|
|
|
8
|
|
461,617
|
|
|
7
|
Total
revenues
|
2,293,988
|
|
|
100
|
|
1,809,398
|
|
|
100
|
|
8,391,984
|
|
|
100
|
|
6,667,216
|
|
|
100
|
Cost of revenues
(1)(2):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscription and
support
|
448,219
|
|
|
19
|
|
318,944
|
|
|
18
|
|
1,556,353
|
|
|
19
|
|
1,188,967
|
|
|
18
|
Professional services
and other
|
177,738
|
|
|
8
|
|
124,735
|
|
|
7
|
|
677,686
|
|
|
8
|
|
465,581
|
|
|
7
|
Total cost of
revenues
|
625,957
|
|
|
27
|
|
443,679
|
|
|
25
|
|
2,234,039
|
|
|
27
|
|
1,654,548
|
|
|
25
|
Gross
profit
|
1,668,031
|
|
|
73
|
|
1,365,719
|
|
|
75
|
|
6,157,945
|
|
|
73
|
|
5,012,668
|
|
|
75
|
Operating expenses
(1)(2):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and
development
|
344,192
|
|
|
15
|
|
250,860
|
|
|
14
|
|
1,208,127
|
|
|
14
|
|
946,300
|
|
|
14
|
Marketing and
sales
|
1,089,243
|
|
|
48
|
|
890,375
|
|
|
49
|
|
3,918,027
|
|
|
47
|
|
3,239,824
|
|
|
49
|
General and
administrative
|
257,941
|
|
|
11
|
|
203,924
|
|
|
11
|
|
967,563
|
|
|
11
|
|
748,238
|
|
|
11
|
Operating lease
termination resulting from purchase of 50 Fremont
|
0
|
|
|
0
|
|
0
|
|
|
0
|
|
0
|
|
|
0
|
|
(36,617)
|
|
|
(1)
|
Total operating
expenses
|
1,691,376
|
|
|
74
|
|
1,345,159
|
|
|
74
|
|
6,093,717
|
|
|
72
|
|
4,897,745
|
|
|
73
|
Income (loss) from
operations
|
(23,345)
|
|
|
(1)
|
|
20,560
|
|
|
1
|
|
64,228
|
|
|
1
|
|
114,923
|
|
|
2
|
Investment
income
|
3,627
|
|
|
0
|
|
3,990
|
|
|
0
|
|
27,374
|
|
|
0
|
|
15,341
|
|
|
0
|
Interest
expense
|
(24,323)
|
|
|
(1)
|
|
(19,465)
|
|
|
(1)
|
|
(88,988)
|
|
|
(1)
|
|
(72,485)
|
|
|
(1)
|
Other income
(expense) (1)
|
20,572
|
|
|
1
|
|
(9,228)
|
|
|
0
|
|
9,072
|
|
|
0
|
|
(15,292)
|
|
|
0
|
Gain on sales of land
and building improvements
|
0
|
|
|
0
|
|
0
|
|
|
0
|
|
0
|
|
|
0
|
|
21,792
|
|
|
0
|
Gains from
acquisitions of strategic investments (3)
|
0
|
|
|
0
|
|
0
|
|
|
0
|
|
13,697
|
|
|
0
|
|
0
|
|
|
0
|
Income (loss) before
benefit from (provision for) income taxes
|
(23,469)
|
|
|
(1)
|
|
(4,143)
|
|
|
0
|
|
25,383
|
|
|
0
|
|
64,279
|
|
|
1
|
Benefit from
(provision for) income taxes (4)
|
(27,971)
|
|
|
(1)
|
|
(21,366)
|
|
|
(1)
|
|
154,249
|
|
|
2
|
|
(111,705)
|
|
|
(2)
|
Net income
(loss)
|
$
|
(51,440)
|
|
|
(2)%
|
|
$
|
(25,509)
|
|
|
(1)%
|
|
$
|
179,632
|
|
|
2%
|
|
$
|
(47,426)
|
|
|
(1)%
|
Basic net income
(loss) per share
|
$
|
(0.07)
|
|
|
|
|
$
|
(0.04)
|
|
|
|
|
$
|
0.26
|
|
|
|
|
$
|
(0.07)
|
|
|
|
Diluted net income
(loss) per share
|
$
|
(0.07)
|
|
|
|
|
$
|
(0.04)
|
|
|
|
|
$
|
0.26
|
|
|
|
|
$
|
(0.07)
|
|
|
|
Shares used in
computing basic net income (loss) per share
|
700,994
|
|
|
|
|
669,025
|
|
|
|
|
687,797
|
|
|
|
|
661,647
|
|
|
|
Shares used in
computing diluted net income (loss) per share
|
700,994
|
|
|
|
|
669,025
|
|
|
|
|
700,217
|
|
|
|
|
661,647
|
|
|
|
___________
|
(1)
|
Amounts include
amortization of purchased intangibles from business combinations,
as follows:
|
|
|
|
Three Months Ended
January 31,
|
|
Fiscal Year Ended
January 31,
|
|
2017
|
|
As a % of
Total
Revenues
|
|
2016
|
|
As a % of
Total
Revenues
|
|
2017
|
|
As a % of
Total
Revenues
|
|
2016
|
|
As a % of
Total
Revenues
|
Cost of
revenues
|
$
|
43,214
|
|
|
2%
|
|
$
|
20,093
|
|
|
1%
|
|
$
|
127,676
|
|
|
2%
|
|
$
|
80,918
|
|
|
1%
|
Marketing and
sales
|
31,000
|
|
|
1
|
|
19,157
|
|
|
1
|
|
97,601
|
|
|
1
|
|
77,152
|
|
|
1
|
Other non-operating
expense
|
564
|
|
|
0
|
|
759
|
|
|
0
|
|
2,491
|
|
|
0
|
|
3,636
|
|
|
0
|
|
|
(2)
|
Amounts include
stock-based expense, as follows:
|
|
|
|
Three Months Ended
January 31,
|
|
Fiscal Year Ended
January 31,
|
|
2017
|
|
As a % of
Total
Revenues
|
|
2016
|
|
As a % of
Total
Revenues
|
|
2017
|
|
As a % of
Total
Revenues
|
|
2016
|
|
As a % of
Total
Revenues
|
Cost of
revenues
|
$
|
30,545
|
|
|
1%
|
|
$
|
20,206
|
|
|
1%
|
|
$
|
107,457
|
|
|
1%
|
|
$
|
69,443
|
|
|
1%
|
Research and
development
|
63,323
|
|
|
3
|
|
32,926
|
|
|
2
|
|
187,487
|
|
|
2
|
|
129,434
|
|
|
2
|
Marketing and
sales
|
113,422
|
|
|
5
|
|
77,333
|
|
|
4
|
|
388,937
|
|
|
5
|
|
289,152
|
|
|
4
|
General and
administrative
|
37,097
|
|
|
2
|
|
28,507
|
|
|
2
|
|
136,486
|
|
|
2
|
|
105,599
|
|
|
2
|
|
|
(3)
|
Represents gains from
acquisitions of strategic investments resulting from acquisitions,
initiated by the Company, of entities in which the Company
previously held an equity interest.
|
(4)
|
Amounts include
a $210.3 million tax benefit recorded during fiscal 2017
as a result of the release of a portion of the valuation allowance
related to the Demandware, Inc. acquisition. Of the $210.3 million
tax benefit, $4.7 million was recorded during the three months
ended January 31, 2017.
|
salesforce.com,
inc.
Consolidated
Balance Sheets
(in
thousands)
(Unaudited)
|
|
|
January 31,
2017
|
|
January 31,
2016
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
1,606,549
|
|
|
$
|
1,158,363
|
|
Marketable
securities
|
602,338
|
|
|
1,567,014
|
|
Accounts receivable,
net
|
3,196,643
|
|
|
2,496,165
|
|
Deferred
commissions
|
311,770
|
|
|
259,187
|
|
Prepaid expenses and
other current assets
|
279,527
|
|
|
250,594
|
|
Total current
assets
|
5,996,827
|
|
|
5,731,323
|
|
Property and
equipment, net
|
1,787,534
|
|
|
1,715,828
|
|
Deferred commissions,
noncurrent
|
227,849
|
|
|
189,943
|
|
Capitalized software,
net (1)
|
141,671
|
|
|
123,065
|
|
Strategic
investments
|
566,953
|
|
|
520,721
|
|
Goodwill
|
7,263,846
|
|
|
3,849,937
|
|
Intangible assets
acquired through business combinations, net (1)
|
1,113,374
|
|
|
490,006
|
|
Other assets, net
(1)
|
486,869
|
|
|
142,097
|
|
Total
assets
|
$
|
17,584,923
|
|
|
$
|
12,762,920
|
|
Liabilities and
stockholders' equity
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts payable,
accrued expenses and other liabilities
|
$
|
1,752,664
|
|
|
$
|
1,349,338
|
|
Deferred
revenue
|
5,505,689
|
|
|
4,267,667
|
|
Total current
liabilities
|
7,258,353
|
|
|
5,617,005
|
|
Deferred revenue,
noncurrent
|
37,113
|
|
|
23,886
|
|
Convertible 0.25%
senior notes, net
|
1,116,360
|
|
|
1,088,097
|
|
Term loan
|
497,221
|
|
|
0
|
|
Loan assumed on 50
Fremont
|
198,268
|
|
|
197,998
|
|
Revolving credit
facility
|
196,542
|
|
|
0
|
|
Other noncurrent
liabilities
|
780,939
|
|
|
833,065
|
|
Total
liabilities
|
10,084,796
|
|
|
7,760,051
|
|
Stockholders'
equity:
|
|
|
|
Common
stock
|
708
|
|
|
671
|
|
Additional paid-in
capital
|
8,040,170
|
|
|
5,705,386
|
|
Accumulated other
comprehensive loss
|
(75,841)
|
|
|
(49,917)
|
|
Accumulated
deficit
|
(464,910)
|
|
|
(653,271)
|
|
Total stockholders'
equity
|
7,500,127
|
|
|
5,002,869
|
|
Total liabilities and
stockholders' equity
|
$
|
17,584,923
|
|
|
$
|
12,762,920
|
|
|
|
(1)
|
Intangible assets
acquired through business combinations, net, includes acquired
developed technology, customer relationships, trade name and
trademark, territory rights and other, and 50 Fremont lease
intangibles. Reclasses were made to conform to the current
presentation. In prior periods, acquired developed technology was
included within Capitalized software, net and customer
relationships, trade name and trademark, territory rights and
other, and 50 Fremont lease intangibles were included in Other
assets, net.
|
salesforce.com,
inc.
Condensed
Consolidated Statements of Cash Flows
(in
thousands)
(Unaudited)
|
|
|
Three Months Ended
January 31,
|
|
Fiscal Year Ended
January 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Operating
activities:
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
|
(51,440)
|
|
|
$
|
(25,509)
|
|
|
$
|
179,632
|
|
|
$
|
(47,426)
|
|
Adjustments to
reconcile net income (loss) to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
180,766
|
|
|
131,912
|
|
|
632,245
|
|
|
525,750
|
|
Amortization of debt
discount and transaction costs
|
9,207
|
|
|
7,177
|
|
|
30,541
|
|
|
27,467
|
|
Gain on sales of land
and building improvements
|
0
|
|
|
0
|
|
|
0
|
|
|
(21,792)
|
|
Gains from
acquisitions of strategic investments
|
0
|
|
|
0
|
|
|
(13,697)
|
|
|
0
|
|
50 Fremont lease
termination
|
0
|
|
|
0
|
|
|
0
|
|
|
(36,617)
|
|
Amortization of
deferred commissions
|
101,014
|
|
|
86,306
|
|
|
371,541
|
|
|
319,074
|
|
Expenses related to
employee stock plans
|
244,387
|
|
|
158,972
|
|
|
820,367
|
|
|
593,628
|
|
Changes in assets and
liabilities, net of business combinations:
|
|
|
|
|
|
|
|
Accounts receivable,
net
|
(1,905,275)
|
|
|
(1,435,439)
|
|
|
(628,477)
|
|
|
(582,425)
|
|
Deferred
commissions
|
(235,065)
|
|
|
(179,155)
|
|
|
(462,030)
|
|
|
(380,022)
|
|
Prepaid expenses and
other current assets and other assets
|
(3,127)
|
|
|
39,191
|
|
|
(28,850)
|
|
|
50,772
|
|
Accounts payable,
accrued expenses and other liabilities
|
325,011
|
|
|
241,710
|
|
|
49,953
|
|
|
253,986
|
|
Deferred
revenue
|
2,040,668
|
|
|
1,445,043
|
|
|
1,210,973
|
|
|
969,686
|
|
Net cash provided by
operating activities (1)
|
706,146
|
|
|
470,208
|
|
|
2,162,198
|
|
|
1,672,081
|
|
Investing
activities:
|
|
|
|
|
|
|
|
Business
combinations, net of cash acquired
|
(360,629)
|
|
|
0
|
|
|
(3,192,739)
|
|
|
(58,680)
|
|
Proceeds from land
and building improvements held for sale
|
0
|
|
|
0
|
|
|
0
|
|
|
127,066
|
|
Purchase of 50
Fremont land and building
|
0
|
|
|
0
|
|
|
0
|
|
|
(425,376)
|
|
Deposit and
withdrawal for purchase of 50 Fremont land and building
|
0
|
|
|
0
|
|
|
0
|
|
|
115,015
|
|
Non-refundable
amounts received for sale of land and building
|
0
|
|
|
0
|
|
|
0
|
|
|
6,284
|
|
Strategic
investments
|
9,341
|
|
|
(41,293)
|
|
|
(29,987)
|
|
|
(366,519)
|
|
Purchases of
marketable securities
|
(83,550)
|
|
|
(595,845)
|
|
|
(1,070,412)
|
|
|
(1,139,267)
|
|
Sales of marketable
securities
|
78,252
|
|
|
86,005
|
|
|
2,005,301
|
|
|
500,264
|
|
Maturities of
marketable securities
|
2,713
|
|
|
14,366
|
|
|
67,454
|
|
|
37,811
|
|
Capital
expenditures
|
(143,974)
|
|
|
(68,465)
|
|
|
(463,958)
|
|
|
(284,476)
|
|
Net cash used in
investing activities
|
(497,847)
|
|
|
(605,232)
|
|
|
(2,684,341)
|
|
|
(1,487,878)
|
|
Financing
activities:
|
|
|
|
|
|
|
|
Proceeds from
revolving credit facility, net
|
748,824
|
|
|
0
|
|
|
748,824
|
|
|
0
|
|
Payments on revolving
credit facility, net
|
(550,000)
|
|
|
0
|
|
|
(550,000)
|
|
|
(300,000)
|
|
Proceeds from term
loan, net
|
0
|
|
|
0
|
|
|
495,550
|
|
|
0
|
|
Proceeds from
employee stock plans
|
85,616
|
|
|
87,652
|
|
|
401,481
|
|
|
455,482
|
|
Principal payments on
capital lease obligations
|
(24,397)
|
|
|
(13,486)
|
|
|
(98,157)
|
|
|
(82,330)
|
|
Net cash provided by
financing activities (1)
|
260,043
|
|
|
74,166
|
|
|
997,698
|
|
|
73,152
|
|
Effect of exchange
rate changes
|
(7,529)
|
|
|
(4,097)
|
|
|
(27,369)
|
|
|
(7,109)
|
|
Net increase
(decrease) in cash and cash equivalents
|
460,813
|
|
|
(64,955)
|
|
|
448,186
|
|
|
250,246
|
|
Cash and cash
equivalents, beginning of period
|
1,145,736
|
|
|
1,223,318
|
|
|
1,158,363
|
|
|
908,117
|
|
Cash and cash
equivalents, end of period
|
$
|
1,606,549
|
|
|
$
|
1,158,363
|
|
|
$
|
1,606,549
|
|
|
$
|
1,158,363
|
|
|
|
(1)
|
At the start of
fiscal 2017, the Company early adopted Accounting Standards Update
No. 2016-09, "Improvements to Employee Share-Based Payment
Accounting (Topic 718)" ("ASU 2016-09"), which addresses among
other items, updates to the presentation and treatment of excess
tax benefits related to stock based compensation. Excess tax
benefits are no longer classified as a reduction of operating cash
flows. The Company has adopted changes to the consolidated
statements of cash flows on a retrospective basis. The impact for
the three and twelve months ended January 31, 2016 was an increase
of $10,798 and $59,496 to net cash provided by operating activities
with a correlating decrease of equal amounts to net cash provided
by (used in) financing activities, respectively.
|
salesforce.com,
inc.
Additional
Metrics
(Unaudited)
|
|
|
Jan 31,
2017
|
|
Oct 31,
2016
|
|
Jul 31,
2016
|
|
Apr 30,
2016
|
|
Jan 31,
2016
|
|
Oct 31,
2015
|
|
Full Time
Equivalent Headcount (1)
|
25,178
|
|
|
23,939
|
|
|
23,247
|
|
|
21,119
|
|
|
19,742
|
|
|
18,726
|
|
|
Financial data (in
thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash, cash
equivalents and marketable securities
|
$
|
2,208,887
|
|
|
$
|
1,751,130
|
|
|
$
|
1,719,946
|
|
|
$
|
3,715,452
|
|
|
$
|
2,725,377
|
|
|
$
|
2,301,306
|
|
|
Strategic
investments
|
$
|
566,953
|
|
|
$
|
555,968
|
|
|
$
|
548,258
|
|
|
$
|
520,750
|
|
|
$
|
520,721
|
|
|
$
|
496,809
|
|
|
Deferred revenue,
current and noncurrent
|
$
|
5,542,802
|
|
|
$
|
3,495,133
|
|
|
$
|
3,823,561
|
|
|
$
|
4,006,914
|
|
|
$
|
4,291,553
|
|
|
$
|
2,846,510
|
|
|
Unbilled deferred
revenue (2)
|
$
|
9,000,000
|
|
|
$
|
8,600,000
|
|
|
$
|
8,000,000
|
|
|
$
|
7,600,000
|
|
|
$
|
7,100,000
|
|
|
$
|
6,700,000
|
|
|
Principal due on our
outstanding debt obligations (3)
|
$
|
2,050,000
|
|
|
$
|
1,850,000
|
|
|
$
|
1,850,000
|
|
|
$
|
1,350,000
|
|
|
$
|
1,350,000
|
|
|
$
|
1,350,000
|
|
|
|
|
(1)
|
Full time equivalent
headcount includes 1,050 from the July 2016 acquisition of
Demandware, Inc.
|
(2)
|
Unbilled deferred
revenue represents future billings under our non-cancelable
subscription agreements that have not been invoiced and,
accordingly, are not recorded in deferred revenue. As of January
31, 2017, $450.0 million of the balance presented relates to
Demandware, Inc.
|
(3)
|
In July 2016, the
Company borrowed $500.0 million under a term loan facility to
partially fund the acquisition of Demandware, Inc. As of January
31, 2017, the Company had $200.0 million outstanding under its
revolving credit facility.
|
Selected Balance
Sheet Accounts (in thousands):
|
|
|
January 31,
2017
|
|
October 31,
2016
|
|
January 31,
2016
|
Prepaid
expenses and other current assets
|
|
|
|
|
|
Prepaid income
taxes
|
$
|
26,932
|
|
|
$
|
22,766
|
|
|
$
|
22,044
|
|
Other taxes
receivable
|
34,177
|
|
|
25,829
|
|
|
27,341
|
|
Prepaid expenses and
other current assets
|
218,418
|
|
|
232,998
|
|
|
201,209
|
|
|
$
|
279,527
|
|
|
$
|
281,593
|
|
|
$
|
250,594
|
|
Property and
equipment, net
|
|
|
|
|
|
Land
|
$
|
183,888
|
|
|
$
|
183,888
|
|
|
$
|
183,888
|
|
Buildings and
building improvements
|
621,377
|
|
|
619,419
|
|
|
614,081
|
|
Computers, equipment
and software
|
1,440,986
|
|
|
1,390,751
|
|
|
1,281,766
|
|
Furniture and
fixtures
|
112,564
|
|
|
101,558
|
|
|
82,242
|
|
Leasehold
improvements
|
627,069
|
|
|
586,040
|
|
|
473,688
|
|
|
2,985,884
|
|
|
2,881,656
|
|
|
2,635,665
|
|
Less accumulated
depreciation and amortization
|
(1,198,350)
|
|
|
(1,124,983)
|
|
|
(919,837)
|
|
|
$
|
1,787,534
|
|
|
$
|
1,756,673
|
|
|
$
|
1,715,828
|
|
|
|
|
|
|
|
Intangible
assets acquired through business combinations, net
(4)
|
January 31,
2017
|
|
October 31,
2016
|
|
January 31,
2016
|
Acquired developed
technology
|
$
|
514,232
|
|
|
$
|
477,616
|
|
|
$
|
232,371
|
|
Customer
relationships
|
589,579
|
|
|
609,733
|
|
|
249,897
|
|
Trade name and
trademark
|
4,601
|
|
|
4,448
|
|
|
0
|
|
Territory rights and
other
|
3,530
|
|
|
4,403
|
|
|
3,787
|
|
50 Fremont lease
intangibles
|
1,432
|
|
|
2,120
|
|
|
3,951
|
|
|
$
|
1,113,374
|
|
|
$
|
1,098,320
|
|
|
$
|
490,006
|
|
|
|
|
|
|
|
Other assets,
net (4)
|
January 31,
2017
|
|
October 31,
2016
|
|
January 31,
2016
|
Deferred income
taxes, noncurrent, net
|
$
|
28,939
|
|
|
$
|
22,095
|
|
|
$
|
15,986
|
|
Long-term
deposits
|
23,597
|
|
|
25,346
|
|
|
19,469
|
|
Domain names and
patents, net of accumulated amortization
|
39,213
|
|
|
35,356
|
|
|
40,332
|
|
Customer contracts
asset
|
281,733
|
|
|
308,484
|
|
|
93
|
|
Other
|
113,387
|
|
|
110,722
|
|
|
66,217
|
|
|
$
|
486,869
|
|
|
$
|
502,003
|
|
|
$
|
142,097
|
|
|
|
|
|
|
|
Accounts
payable, accrued expenses and other liabilities
|
|
|
|
|
|
Accounts
payable
|
$
|
115,257
|
|
|
$
|
140,541
|
|
|
$
|
71,481
|
|
Accrued
compensation
|
730,390
|
|
|
558,945
|
|
|
554,502
|
|
Non-cash equity
liability
|
68,355
|
|
|
74,570
|
|
|
0
|
|
Accrued other
liabilities
|
521,405
|
|
|
498,774
|
|
|
454,287
|
|
Accrued income and
other taxes payable
|
239,699
|
|
|
149,133
|
|
|
205,781
|
|
Accrued professional
costs
|
38,254
|
|
|
38,331
|
|
|
33,814
|
|
Accrued
rent
|
19,710
|
|
|
17,055
|
|
|
14,071
|
|
Financing obligation-
leased facility, current (5)
|
19,594
|
|
|
19,492
|
|
|
15,402
|
|
|
$
|
1,752,664
|
|
|
$
|
1,496,841
|
|
|
$
|
1,349,338
|
|
Other
Noncurrent liabilities
|
|
|
|
|
|
Deferred income taxes
and income taxes payable
|
$
|
99,378
|
|
|
$
|
93,454
|
|
|
$
|
85,996
|
|
Financing obligation,
building - leased facility (5)
|
200,711
|
|
|
201,283
|
|
|
196,711
|
|
Long-term lease
liabilities and other
|
480,850
|
|
|
490,550
|
|
|
550,358
|
|
|
$
|
780,939
|
|
|
$
|
785,287
|
|
|
$
|
833,065
|
|
|
|
(4)
|
As of January 31,
2017, Intangible assets acquired through business combinations,
net, includes customer relationships, trade name and trademark,
territory rights and other, and 50 Fremont lease intangibles. In
prior periods, customer relationships, trade name and trademark,
territory rights and other, and 50 Fremont lease intangibles were
included in Other assets, net
|
(5)
|
As of January 31,
2016, 350 Mission was in construction. In March 2016, construction
was completed on the building.
|
Supplemental
Revenue Analysis
|
|
Subscription and
support revenue by cloud service offering (in
millions):
|
Three Months Ended
January 31,
|
|
Fiscal Year Ended
January 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Sales
Cloud
|
$
|
804.9
|
|
|
$
|
708.9
|
|
|
$
|
3,060.6
|
|
|
$
|
2,699.0
|
|
Service
Cloud
|
615.3
|
|
|
495.3
|
|
|
2,320.7
|
|
|
1,817.8
|
|
Salesforce Platform
and Other
|
391.7
|
|
|
294.5
|
|
|
1,441.6
|
|
|
1,034.7
|
|
Marketing Cloud
(1)
|
298.8
|
|
|
184.0
|
|
|
933.3
|
|
|
654.1
|
|
|
$
|
2,110.7
|
|
|
$
|
1,682.7
|
|
|
$
|
7,756.2
|
|
|
$
|
6,205.6
|
|
|
|
(1)
|
Marketing Cloud
includes subscription and support revenue generated from
Demandware, Inc., which the Company acquired in July
2016.
|
|
Three Months Ended
January 31,
|
|
Fiscal Year Ended
January 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Total revenues by
geography (in thousands):
|
|
|
|
|
|
|
|
Americas
|
$
|
1,718,197
|
|
|
$
|
1,335,304
|
|
|
$
|
6,224,971
|
|
|
$
|
4,910,745
|
|
Europe
|
360,876
|
|
|
314,395
|
|
|
1,373,547
|
|
|
1,162,808
|
|
Asia
Pacific
|
214,915
|
|
|
159,699
|
|
|
793,466
|
|
|
593,663
|
|
|
$
|
2,293,988
|
|
|
$
|
1,809,398
|
|
|
$
|
8,391,984
|
|
|
$
|
6,667,216
|
|
As a percentage of
total revenues:
|
|
|
|
|
|
|
|
Total revenues by
geography:
|
|
|
|
|
|
|
|
Americas
|
75%
|
|
|
74%
|
|
|
74%
|
|
|
74%
|
|
Europe
|
16
|
|
|
17
|
|
|
16
|
|
|
17
|
|
Asia
Pacific
|
9
|
|
|
9
|
|
|
10
|
|
|
9
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
Revenue constant
currency growth rates
(as compared to
the comparable prior periods)
|
Three Months Ended January
31, 2017 compared to Three Months Ended
January 31, 2016
|
|
Three Months Ended October
31, 2016 compared to Three
Months Ended October 31,
2015
|
|
Three Months Ended January
31, 2016 compared to Three
Months Ended January 31,
2015
|
Americas
|
29%
|
|
27%
|
|
27%
|
Europe
|
26%
|
|
27%
|
|
32%
|
Asia
Pacific
|
30%
|
|
29%
|
|
26%
|
Total
growth
|
28%
|
|
27%
|
|
27%
|
We present constant currency information to provide a framework
for assessing how our underlying business performed excluding the
effect of foreign currency rate fluctuations. To present this
information, current and comparative prior period results for
entities reporting in currencies other than United States dollars are converted into
United States dollars at the
weighted average exchange rate for the quarter being compared to
for growth rate calculations presented, rather than the actual
exchange rates in effect during that period.
|
January 31, 2017
compared to
January 31, 2016
|
|
October 31, 2016
compared to
October 31, 2015
|
|
January 31, 2016
compared to
January 31, 2015
|
Deferred revenue,
current and noncurrent constant currency growth rates (as compared
to the comparable prior periods)
|
|
|
|
|
|
Total
growth
|
29%
|
|
25%
|
|
31%
|
We present constant currency information for deferred revenue,
current and noncurrent to provide a framework for assessing how our
underlying business performed excluding the effects of foreign
currency rate fluctuations. To present the information above,
we convert the deferred revenue balances in local currencies in
previous comparable periods using the
United States dollar currency exchange rate as on the most
recent balance sheet date.
Supplemental
Diluted Share Count Information
(in
thousands)
|
|
Three Months Ended
January 31,
|
|
Fiscal Year Ended
January 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Weighted-average
shares outstanding for basic earnings per share
|
700,994
|
|
|
669,025
|
|
|
687,797
|
|
|
661,647
|
|
Effect of dilutive
securities (1):
|
|
|
|
|
|
|
|
Convertible senior
notes (2)
|
1,642
|
|
|
2,314
|
|
|
1,906
|
|
|
1,302
|
|
Employee stock
awards
|
8,567
|
|
|
11,626
|
|
|
10,514
|
|
|
13,881
|
|
Adjusted
weighted-average shares outstanding and assumed conversions for
Non-GAAP diluted earnings per share
|
711,203
|
|
|
682,965
|
|
|
700,217
|
|
|
676,830
|
|
|
|
(1)
|
The effects of these
dilutive securities were not included in the GAAP calculation of
diluted net loss per share for the three months ended January 31,
2017 and three and twelve months ended January 31, 2016 because the
effect would have been anti-dilutive.
|
(2)
|
The 0.25% senior
notes were not convertible, however there is a dilutive effect for
shares outstanding for all periods presented.
|
Supplemental Cash
Flow Information
Free cash flow
analysis, a non-GAAP measure
(in
thousands)
|
|
|
Three Months Ended
January 31,
|
|
Fiscal Year Ended
January 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Operating cash
flow
|
|
|
|
|
|
|
|
GAAP net cash
provided by operating activities
|
$
|
706,146
|
|
|
$
|
470,208
|
|
|
$
|
2,162,198
|
|
|
$
|
1,672,081
|
|
Less:
|
|
|
|
|
|
|
|
Capital
expenditures
|
(143,974)
|
|
|
(68,465)
|
|
|
(463,958)
|
|
|
(284,476)
|
|
Free cash
flow
|
$
|
562,172
|
|
|
$
|
401,743
|
|
|
$
|
1,698,240
|
|
|
$
|
1,387,605
|
|
Our free cash flow analysis includes GAAP net cash provided by
operating activities less capital expenditures. The capital
expenditures balance does not include our strategic investments,
nor does it include any costs or activities related to our purchase
of 50 Fremont land and building, and construction costs related to
building - leased facilities.
Comprehensive
Income (Loss)
(in
thousands)
(Unaudited)
|
|
|
Three Months Ended
January 31,
|
|
Fiscal Year Ended
January 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Net income
(loss)
|
$
|
(51,440)
|
|
|
$
|
(25,509)
|
|
|
$
|
179,632
|
|
|
$
|
(47,426)
|
|
Other comprehensive
income (loss), before tax and net of reclassification
adjustments:
|
|
|
|
|
|
|
|
Foreign currency
translation and other losses
|
(14,547)
|
|
|
(8,197)
|
|
|
(43,070)
|
|
|
(16,616)
|
|
Unrealized gains
(losses) on investments
|
(6,461)
|
|
|
(9,530)
|
|
|
14,500
|
|
|
(9,193)
|
|
Other comprehensive
loss, before tax
|
(21,008)
|
|
|
(17,727)
|
|
|
(28,570)
|
|
|
(25,809)
|
|
Tax effect
|
8,110
|
|
|
1,135
|
|
|
2,646
|
|
|
0
|
|
Other comprehensive
loss, net of tax
|
(12,898)
|
|
|
(16,592)
|
|
|
(25,924)
|
|
|
(25,809)
|
|
Comprehensive income
(loss)
|
$
|
(64,338)
|
|
|
$
|
(42,101)
|
|
|
$
|
153,708
|
|
|
$
|
(73,235)
|
|
salesforce.com,
inc.
GAAP Results
Reconciled to Non-GAAP Results
The following table
reflects selected GAAP results reconciled to non-GAAP
results
(in thousands, except
per share data)
(Unaudited)
|
|
|
Three Months Ended
January 31,
|
|
Fiscal Year Ended
January 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Non-GAAP gross
profit
|
|
|
|
|
|
|
|
GAAP gross
profit
|
$
|
1,668,031
|
|
|
$
|
1,365,719
|
|
|
$
|
6,157,945
|
|
|
$
|
5,012,668
|
|
Plus:
|
|
|
|
|
|
|
|
Amortization of
purchased intangibles (a)
|
43,214
|
|
|
20,093
|
|
|
127,676
|
|
|
80,918
|
|
Stock-based expense
(b)
|
30,545
|
|
|
20,206
|
|
|
107,457
|
|
|
69,443
|
|
Non-GAAP gross
profit
|
$
|
1,741,790
|
|
|
$
|
1,406,018
|
|
|
$
|
6,393,078
|
|
|
$
|
5,163,029
|
|
Non-GAAP operating
expenses
|
|
|
|
|
|
|
|
GAAP operating
expenses
|
$
|
1,691,376
|
|
|
$
|
1,345,159
|
|
|
$
|
6,093,717
|
|
|
$
|
4,897,745
|
|
Less:
|
|
|
|
|
|
|
|
Amortization of
purchased intangibles (a)
|
(31,000)
|
|
|
(19,157)
|
|
|
(97,601)
|
|
|
(77,152)
|
|
Stock-based expense
(b)
|
(213,842)
|
|
|
(138,766)
|
|
|
(712,910)
|
|
|
(524,185)
|
|
Plus:
|
|
|
|
|
|
|
|
Operating lease
termination resulting from purchase of 50 Fremont
|
0
|
|
|
0
|
|
|
0
|
|
|
36,617
|
|
Non-GAAP operating
expenses
|
$
|
1,446,534
|
|
|
$
|
1,187,236
|
|
|
$
|
5,283,206
|
|
|
$
|
4,333,025
|
|
Non-GAAP income
from operations
|
|
|
|
|
|
|
|
GAAP income (loss)
from operations
|
$
|
(23,345)
|
|
|
$
|
20,560
|
|
|
$
|
64,228
|
|
|
$
|
114,923
|
|
Plus:
|
|
|
|
|
|
|
|
Amortization of
purchased intangibles (a)
|
74,214
|
|
|
39,250
|
|
|
225,277
|
|
|
158,070
|
|
Stock-based expense
(b)
|
244,387
|
|
|
158,972
|
|
|
820,367
|
|
|
593,628
|
|
Less:
|
|
|
|
|
|
|
|
Operating lease
termination resulting from purchase of 50 Fremont, net
|
0
|
|
|
0
|
|
|
0
|
|
|
(36,617)
|
|
Non-GAAP income from
operations
|
$
|
295,256
|
|
|
$
|
218,782
|
|
|
$
|
1,109,872
|
|
|
$
|
830,004
|
|
Non-GAAP
non-operating income (loss) (c)
|
|
|
|
|
|
|
|
GAAP non-operating
loss
|
$
|
(124)
|
|
|
$
|
(24,703)
|
|
|
$
|
(38,845)
|
|
|
$
|
(50,644)
|
|
Plus:
|
|
|
|
|
|
|
|
Amortization of debt
discount, net
|
6,344
|
|
|
6,188
|
|
|
25,137
|
|
|
24,504
|
|
Amortization of
acquired lease intangible
|
564
|
|
|
759
|
|
|
2,491
|
|
|
3,636
|
|
Less:
|
|
|
|
|
|
|
|
Gain on sales of land
and building improvements
|
0
|
|
|
0
|
|
|
0
|
|
|
(21,792)
|
|
Gains from
acquisitions of strategic investments
|
0
|
|
|
0
|
|
|
(13,697)
|
|
|
0
|
|
Non-GAAP
non-operating income (loss)
|
$
|
6,784
|
|
|
$
|
(17,756)
|
|
|
$
|
(24,914)
|
|
|
$
|
(44,296)
|
|
Non-GAAP net
income
|
|
|
|
|
|
|
|
GAAP net income
(loss)
|
$
|
(51,440)
|
|
|
$
|
(25,509)
|
|
|
$
|
179,632
|
|
|
$
|
(47,426)
|
|
Plus:
|
|
|
|
|
|
|
|
Amortization of
purchased intangibles (a)
|
74,214
|
|
|
39,250
|
|
|
225,277
|
|
|
158,070
|
|
Amortization of
acquired lease intangible
|
564
|
|
|
759
|
|
|
2,491
|
|
|
3,636
|
|
Stock-based expense
(b)
|
244,387
|
|
|
158,972
|
|
|
820,367
|
|
|
593,628
|
|
Amortization of debt
discount, net
|
6,344
|
|
|
6,188
|
|
|
25,137
|
|
|
24,504
|
|
Less:
|
|
|
|
|
|
|
|
Operating lease
termination resulting from purchase of 50 Fremont, net
|
0
|
|
|
0
|
|
|
0
|
|
|
(36,617)
|
|
Gain on sales of land
and building improvements
|
0
|
|
|
0
|
|
|
0
|
|
|
(21,792)
|
|
Gains from
acquisitions of strategic investments
|
0
|
|
|
0
|
|
|
(13,697)
|
|
|
0
|
|
Income tax effects
and adjustments
|
(77,743)
|
|
|
(49,998)
|
|
|
(533,984)
|
|
|
(167,221)
|
|
Non-GAAP net
income
|
$
|
196,326
|
|
|
$
|
129,662
|
|
|
$
|
705,223
|
|
|
$
|
506,782
|
|
|
Three Months Ended
January 31,
|
|
Fiscal Year Ended
January 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
Non-GAAP diluted
earnings per share
|
|
|
|
|
|
|
|
GAAP diluted income
(loss) per share (d)
|
$
|
(0.07)
|
|
|
$
|
(0.04)
|
|
|
$
|
0.26
|
|
|
$
|
(0.07)
|
|
Plus:
|
|
|
|
|
|
|
|
Amortization of
purchased intangibles
|
0.10
|
|
|
0.06
|
|
|
0.32
|
|
|
0.23
|
|
Amortization of
acquired lease intangible
|
0.00
|
|
|
0.00
|
|
|
0.00
|
|
|
0.01
|
|
Stock-based
expense
|
0.34
|
|
|
0.23
|
|
|
1.17
|
|
|
0.88
|
|
Amortization of debt
discount, net
|
0.01
|
|
|
0.01
|
|
|
0.04
|
|
|
0.04
|
|
Less:
|
|
|
|
|
|
|
|
Operating lease
termination resulting from purchase of 50 Fremont, net
|
0.00
|
|
|
0.00
|
|
|
0.00
|
|
|
(0.05)
|
|
Gain on sales of land
and building improvements
|
0.00
|
|
|
0.00
|
|
|
0.00
|
|
|
(0.03)
|
|
Gains from
acquisitions of strategic investments
|
0.00
|
|
|
0.00
|
|
|
(0.02)
|
|
|
0.00
|
|
Income tax effects
and adjustments
|
(0.10)
|
|
|
(0.07)
|
|
|
(0.76)
|
|
|
(0.26)
|
|
Non-GAAP diluted
earnings per share
|
$
|
0.28
|
|
|
$
|
0.19
|
|
|
$
|
1.01
|
|
|
$
|
0.75
|
|
Shares used in
computing diluted net income per share
|
711,203
|
|
|
682,965
|
|
|
700,217
|
|
|
676,830
|
|
|
|
a)
|
Amortization of
purchased intangibles were as follows:
|
|
|
|
Three Months Ended
January 31,
|
|
Fiscal Year Ended
January 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Cost of
revenues
|
$
|
43,214
|
|
|
$
|
20,093
|
|
|
$
|
127,676
|
|
|
$
|
80,918
|
|
Marketing and
sales
|
31,000
|
|
|
19,157
|
|
|
97,601
|
|
|
77,152
|
|
|
$
|
74,214
|
|
|
$
|
39,250
|
|
|
$
|
225,277
|
|
|
$
|
158,070
|
|
|
|
b)
|
Stock-based expense
was as follows:
|
|
|
|
Three Months Ended
January 31,
|
|
Fiscal Year Ended
January 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Cost of
revenues
|
$
|
30,545
|
|
|
$
|
20,206
|
|
|
$
|
107,457
|
|
|
$
|
69,443
|
|
Research and
development
|
63,323
|
|
|
32,926
|
|
|
187,487
|
|
|
129,434
|
|
Marketing and
sales
|
113,422
|
|
|
77,333
|
|
|
388,937
|
|
|
289,152
|
|
General and
administrative
|
37,097
|
|
|
28,507
|
|
|
136,486
|
|
|
105,599
|
|
|
$
|
244,387
|
|
|
$
|
158,972
|
|
|
$
|
820,367
|
|
|
$
|
593,628
|
|
|
|
c)
|
GAAP non-operating
income (loss) consists of investment income, interest expense,
other expense and gains from acquisitions of strategic
investments.
|
d)
|
Reported GAAP loss
per share was calculated using the basic share count.
Non-GAAP diluted earnings per share was calculated using the
diluted share count.
|
salesforce.com,
inc.
Computation of
Basic and Diluted GAAP and Non-GAAP Net Income (Loss) Per
Share
(in thousands, except
per share data)
(Unaudited)
|
|
|
Three Months Ended
January 31,
|
|
Fiscal Year Ended
January 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
GAAP basic net
income (loss) per share
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
|
(51,440)
|
|
|
$
|
(25,509)
|
|
|
$
|
179,632
|
|
|
$
|
(47,426)
|
|
Basic net income
(loss) per share
|
$
|
(0.07)
|
|
|
$
|
(0.04)
|
|
|
$
|
0.26
|
|
|
$
|
(0.07)
|
|
Shares used in
computing basic net income (loss) per share
|
700,994
|
|
|
669,025
|
|
|
687,797
|
|
|
661,647
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
January 31,
|
|
Fiscal Year Ended
January 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Non-GAAP basic net
income per share
|
|
|
|
|
|
|
|
Non-GAAP net
income
|
$
|
196,326
|
|
|
$
|
129,662
|
|
|
$
|
705,223
|
|
|
$
|
506,782
|
|
Basic Non-GAAP net
income per share
|
$
|
0.28
|
|
|
$
|
0.19
|
|
|
$
|
1.03
|
|
|
$
|
0.77
|
|
Shares used in
computing basic net income per share
|
700,994
|
|
|
669,025
|
|
|
687,797
|
|
|
661,647
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
January 31,
|
|
Fiscal Year Ended
January 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
GAAP diluted net
income (loss) per share
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
|
(51,440)
|
|
|
$
|
(25,509)
|
|
|
$
|
179,632
|
|
|
$
|
(47,426)
|
|
Diluted net income
(loss) per share
|
$
|
(0.07)
|
|
|
$
|
(0.04)
|
|
|
$
|
0.26
|
|
|
$
|
(0.07)
|
|
Shares used in
computing diluted net loss per share
|
700,994
|
|
|
669,025
|
|
|
700,217
|
|
|
661,647
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
January 31,
|
|
Fiscal Year Ended
January 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Non-GAAP diluted
net income per share
|
|
|
|
|
|
|
|
Non-GAAP net
income
|
$
|
196,326
|
|
|
$
|
129,662
|
|
|
$
|
705,223
|
|
|
$
|
506,782
|
|
Diluted Non-GAAP net
income per share
|
$
|
0.28
|
|
|
$
|
0.19
|
|
|
$
|
1.01
|
|
|
$
|
0.75
|
|
Shares used in
computing diluted net income per share
|
711,203
|
|
|
682,965
|
|
|
700,217
|
|
|
676,830
|
|
Non-GAAP Financial Measures: This press release
includes information about non-GAAP diluted earnings per share,
non-GAAP tax rates, non-GAAP free cash flow, and constant currency
revenue and constant currency deferred revenue growth rates
(collectively the "non-GAAP financial measures"). These non-GAAP
financial measures are measurements of financial performance that
are not prepared in accordance with U.S. generally accepted
accounting principles and computational methods may differ from
those used by other companies. Non-GAAP financial measures are not
meant to be considered in isolation or as a substitute for
comparable GAAP measures and should be read only in conjunction
with the company's consolidated financial statements prepared in
accordance with GAAP. Management uses both GAAP and non-GAAP
measures when planning, monitoring, and evaluating the company's
performance.
The primary purpose of using non-GAAP measures is to provide
supplemental information that may prove useful to investors who
wish to consider the impact of certain non-cash or non-recurring
items on the company's operating performance and to enable
investors to evaluate the company's results in the same way
management does. These non-cash or non-recurring items generally
consist of one-time items resulting from strategic decisions that
affect multiple periods or periods unrelated to when the actual
items were incurred. Management believes that supplementing GAAP
disclosure with non-GAAP disclosure that excludes items that are
not directly related to performance in any particular period
provides investors with a more complete view of the company's
operational performance and allows for meaningful period-to-period
comparisons and analysis of trends in the company's business.
Further, to the extent that other companies use similar methods in
calculating non-GAAP measures, the provision of supplemental
non-GAAP information can allow for a comparison of the company's
relative performance against other companies that also report
non-GAAP operating results.
Non-GAAP diluted earnings per share excludes the impact of the
following items: stock-based compensation, amortization of
acquisition-related intangibles, amortization of acquired leases,
the net amortization of debt discount on the company's convertible
senior notes, gains/losses on sales of land and building
improvements, gains/losses on company-initiated acquisitions of
entities in which the company held an equity investment, and
termination of office leases, as well as income tax
adjustments. These items are excluded because the decisions
which gave rise to these items were not made to increase revenue in
a particular period, but were made for the company's long-term
benefit over multiple periods.
Specifically, management is excluding the following items from
its non-GAAP earnings per share for Q4 and its non-GAAP estimates
for Q1 and FY18:
- Stock-Based Expenses: The company's compensation strategy
includes the use of stock-based compensation to attract and retain
employees and executives. It is principally aimed at aligning
their interests with those of our stockholders and at long-term
employee retention, rather than to motivate or reward operational
performance for any particular period. Thus, stock-based
compensation expense varies for reasons that are generally
unrelated to operational decisions and performance in any
particular period.
- Amortization of Purchased Intangibles and Acquired
Leases: The company views amortization of acquisition- and
building-related intangible assets, such as the amortization of the
cost associated with an acquired company's research and development
efforts, trade names, customer lists and customer relationships,
and acquired lease intangibles, as items arising from
pre-acquisition activities determined at the time of an
acquisition. While these intangible assets are continually
evaluated for impairment, amortization of the cost of purchased
intangibles is a static expense, one that is not typically affected
by operations during any particular period.
- Amortization of Debt Discount: Under GAAP, certain
convertible debt instruments that may be settled in cash (or other
assets) on conversion are required to be separately accounted for
as liability (debt) and equity (conversion option) components of
the instrument in a manner that reflects the issuer's
non-convertible debt borrowing rate. Accordingly, for GAAP
purposes we are required to recognize imputed interest expense on
the company's $1.15 billion of
convertible senior notes due 2018 that were issued in a private
placement in March 2013. The imputed interest rate was
approximately 2.5% for the convertible notes due 2018, while the
actual coupon interest rate of the notes is 0.25%. The
difference between the imputed interest expense and the coupon
interest expense, net of the interest amount capitalized, is
excluded from management's assessment of the company's operating
performance because management believes that this non-cash expense
is not indicative of ongoing operating performance.
- Gains on Acquisitions of Strategic Investments: The company
views gains on sales of its strategic investments resulting from
acquisitions initiated by the company in which an equity interest
was previously held as discrete events and not indicative of
operational performance during any particular period.
- Income Tax Effects and Adjustments: The Company utilizes a
fixed long-term projected non-GAAP tax rate in order to provide
better consistency across the interim reporting periods by
eliminating the effects of non-recurring and period-specific items
such as changes in the tax valuation allowance and tax effects of
acquisitions-related costs, since each of these can vary in size
and frequency. When projecting this long-term rate, the Company
evaluated a three-year financial projection that excludes the
direct impact of the following non-cash items: stock-based
expenses, amortization of purchased intangibles, amortization of
acquired leases, amortization of debt discount, gains/losses on the
sales of land and building improvements, gains on sales of
strategic investments, and termination of office leases. The
projected rate also assumes no new acquisitions in the three-year
period, and considers other factors including the Company's tax
structure, its tax positions in various jurisdictions and key
legislation in major jurisdictions where the company operates. This
long-term rate could be subject to change for a variety of reasons,
such as significant changes in the geographic earnings mix
including acquisition activity, or fundamental tax law changes in
major jurisdictions where the company operates. The Company
re-evaluates this long-term rate on an annual basis or if any
significant events that may materially affect this long-term rate
occur. The non-GAAP tax rate for fiscal 2017 was 35.0 percent. The
non-GAAP tax rate for fiscal 2018 is 34.5 percent.
The company defines the non-GAAP measure free cash flow as GAAP
net cash provided by operating activities, less capital
expenditures. For this purpose, capital expenditures does not
include our strategic investments, nor does it include any costs or
activities related to our purchase of 50 Fremont land and building,
and building - leased facilities.
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/salesforce-announces-fiscal-2017-fourth-quarter-and-full-year-results-300415195.html
SOURCE Salesforce